If you work in the recruitment space—or HR in general—you likely know about Applicant Tracking Systems. And if you’re reading this article, you may be in the market for one, or in the process of researching whether or not you need one. In both cases, you’ve come to the right place.
This page serves as your complete guide to Applicant Tracking Systems (ATS), covering everything from what they are, to key benefits and misconceptions, to the different types of ATS platforms available to you. We’ll discuss how to choose the right platform, and what’s in store for ATS tools in the future.
Let’s dive in.
What is an Applicant Tracking System?
An Applicant Tracking System (ATS) is a software application companies can use to structure and customize their hiring into an efficient and scalable process.
What does an ATS do?
The primary goal of an Applicant Tracking System is to simplify the recruitment process and to make it more effective and efficient.
This is accomplished by giving recruiters access to a powerful, centralized platform to collect and view applicants, track their progress, and filter them out based on their qualifications.
Generally, more powerful Applicant Tracking Systems are cloud-based SaaS (Software as a Service) solutions, which you can access anywhere and anytime. The scope and complexity of specific ATS platforms and the cost will vary depending on what type of business they cater to.
On-site and SaaS solutions will generally be more expensive but offer significantly more features and services than open-source options.
The Applicant Tracking System definition included above is worded broadly because the capabilities of these modern systems affect nearly the entire hiring process, especially:
- Candidate sourcing (automated job posting, application pages that integrate into the candidate database, and employer brand management.)
- Candidate management (automatic uploading of candidate information and application documents into a central database, adding scheduling and screening information to candidate files, and perpetual storage of current and former candidates to generate talent pools.)
- Pre-screening candidates (keyword parsing of resumes and cover letters, automated screening of unqualified candidates, automated outreach, and interview scheduling.)
- Screening candidates (managing and hosting online tests and video interviews, storing and adding screening results to candidate files, and collaborating with recruitment team members on candidate profiles.)
- Extending job offers (generating and sending offer letters, collecting signed documentation, and adding them to candidate files.)
- Employee onboarding (assigning onboarding materials, tracking completion, and ensuring all compliance documentation is completed.)
- Recruitment process optimization (intelligence and metrics into every step of the recruitment process, allowing recruiters to identify bottlenecks and make efficiency changes.)
The ATS features above reflect only the most common capabilities available on most platforms today. There are many more that recruiters will discover once they integrate an ATS into their recruitment process.
Benefits of an Applicant Tracking System
The core benefit of an ATS is that it lessens the amount of manual, repetitive, and tedious tasks that a recruiter must complete.
First, it frees up the recruiter, allowing them to work on more important tasks. Second, automation allows for a faster, more standardized, and more streamlined recruitment experience, and creates better results for the company and the job seekers.
Here are some of the primary reasons that modern recruitment software is necessary for today's hiring landscape:
- They improve the quality of a company's hire, and good hiring is one of the best predictors of a company's future success.
- HR departments and managers are struggling to find and retain top talent. Recruitment software is a powerful weapon for helping to minimize this stress.
- Poor HR technology has been the norm. Technological advances have leapfrogged recruitment software to the top of the SaaS market to the benefit of hiring teams.
That last point is a major driving force behind why more and more companies are adopting modern Applicant Tracking Systems. An ATS was originally just a platform to store digital copies of resumes and cover letters. They could not automatically parse through that information and quickly deliver usable information to recruiters.
This ability to not only digitize but to automate and enhance the entire hiring process is thanks to cloud computing, AI, and more powerful processing technologies. Applicant Tracking Systems— and recruitment technology in general—are at the center of this renaissance, leading to numerous benefits for companies worldwide.
Lets dig into those specific ATS benefits now.
1. Decreased workload
When deployed correctly, an Applicant Tracking System can benefit recruiters and hiring managers in the following ways:
- Automatically upload job postings to various job boards in one click
- Collection, storage, and aggregation of candidate information are automated
- Automated or keyword-based parsing of resumes and cover letters speeds up the screening process
- Easily schedule interviews with candidates
- Record the results of interviews and other screening activities
- Secure new hire with e-signatures
While these first six benefits help recruiters save time on manual and repetitive work, they also enhance the candidate experience in several ways.
2. Improved candidate experience
Streamlining your recruitment also makes it better for the candidates as they go through the hiring process. Here's how.
- Seamless communication from application to offer (or rejection)
- Quicker screening and better clarity into where a candidate stands
- Assurance that the hiring process is fair
- Faster application to decision timeframes
Each of these benefits to the recruiter and candidate is a direct result of improvements to the overall recruitment process, which is perhaps the biggest benefit of an Applicant Tracking System.
3. A more efficient recruitment process
ATS automation and data management impact the hiring process in many positive ways. These impacts will vary greatly depending on the capacity of the Applicant Tracking System and how an organization uses it.
Here are some of the primary hiring process improvements that can be attributed to Applicant Tracking Systems:
- Provides insights into the effectiveness of different recruitment processes
- Tracks and reports on essential recruitment metrics
- Automates critical stages and manual tasks in the hiring process
- Stores all current and past job seekers
- Enables collaborative hiring by giving recruitment teams centralized access to candidate profiles
- Provides an “always-on” platform from which to manage recruitment.
All of these benefits lead to the final, core benefit of an ATS: better hiring results.
4. Better hiring results
The central goal of any hiring process is to continuously improve the performance and retention rates of new hires, while also optimizing return on effort and investment.
To that end, “better hiring results” could be broken down into three primary fields:
- Shorter time-to-hire. Hiring faster while maintaining quality reduces productivity downtime company-wide and time wasted within the HR department.
- Improved cost-per-hire. Getting better candidates faster and for less money improves overall company profitability in the long run.
- Better quality-of-hire. Based on performance reviews, ramp-up time, turnover, retention rates, and hiring manager satisfaction, this is the master metric for how successful a recruitment decision was.
Of course, each benefit is achievable if you have the right features for your organization and, most importantly, only if you have the right recruitment strategy.
Now that we've mentioned what an Applicant Tracking System can do and its benefits to recruiters, hiring managers, and job seekers, let's clear up some misconceptions about ATSs.
Four misconceptions about Applicant Tracking Systems
A few common misconceptions exist about what an ATS can do for its users. If you’re in the market for one, we recommend reading this section to learn more about what you can expect when purchasing an ATS.
1. Buying an ATS is not going to get you an influx of candidates
If you’re currently struggling with attracting candidates for job openings, buying an ATS will not solve the problem. Attracting candidates relates to your recruitment strategy and employer branding, and no ATS will do that for you.
It’s important to understand how the recruitment market in your industry works, what candidates are looking for, and how to best present your company culture to attract the best candidates.
After you’ve conducted your research, built your strategy, and identified what you need to help you to achieve your goals, you’ll have a better idea of what functionalities you require. You can then start looking for an ATS that will help solve those issues.
2. Buying an ATS will not solve all your sourcing challenges
Another common recruitment challenge is sourcing candidates. Some ATSs can post your job openings to multiple job boards and save you the hassle of doing this manually. But if you are not making a good first impression with your job descriptions and your application process is overly complicated, candidates will not be rushing to apply for your jobs.
Your recruitment and employer branding strategies greatly influence candidates’ perception of your company and the candidate application process. Even if you could automate the distribution of your job openings using an ATS so that more candidates see it, it doesn’t guarantee any applications. That’s where the importance of employer branding and brand visibility comes into the picture.
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The truth of the matter is that most sourcing practices are manual. While some tools and extensions may help you source candidates from websites such as Linkedin, some roles will require manual sourcing, especially if they’re niche and hard-to-fill positions. ATSs are there to accelerate and facilitate the hiring process, but they are not a substitute for the process itself. It’s important to keep this in mind when buying an ATS.
3. An ATS is not going to help you pick the best candidate for the job, nor should it
It doesn’t take a lot of effort these days to find conversations from both candidates and career coaches about how ATSs are responsible for rejecting candidates. While some companies utilize subpar AI functionalities to disqualify candidates, good recruiters and their hiring managers are looking at candidates’ applications, assessing them, and responding accordingly.
A good ATS will give recruiters and hiring managers a better overview of all candidates and resumes, thanks to pipeline overviews and resume parsing. But ultimately, recruiters and their hiring managers will be responsible for reviewing the applications and deciding on the next steps. An ATS cannot and should not be making these decisions.
If your goal is to use an ATS to find candidates for you, you will be disappointed. And so will your candidates. When they receive rejection emails seconds after applying, candidates will realize that no one has reviewed their application.
So before adding a shiny new recruitment tool to your tech stack, assess your long-term recruitment strategy and set up an effective process, and then look for an ATS that fits your needs.
4. Buying or switching to a new ATS is time-consuming
HR and recruitment professionals are sometimes reluctant to implement or switch to a new ATS because they fear it requires a substantial time investment and might not be worth the sacrifice.
Some already have a process in place, are unsure about implementing something new, and are afraid of change. Others have had a negative experience implementing an ATS and now have hesitations about switching to another platform, despite being unhappy.
Researching and implementing an ATS does require some time and effort. But finding a solution that meets your organization’s needs and can scale with you as you grow will save you time in the long run — well worth the effort.
After you’ve conducted your research, built your strategy, and identified what you need to help you to achieve your goals, you’ll have a better idea of what functionalities you require. You can then start looking for an ATS that will help solve those issues.
Now that we’ve covered what an ATS can and cannot help you achieve, we’ll dive into what to consider when buying an ATS.
ATS types to consider
Choosing the right ATS platform can sometimes be confusing and daunting. There are simply too many options to choose from, meaning that you need a systematic and objective process for making this mission-critical decision for your business.
The two primary variables that will influence what ATS provider you choose are the platform (or hosting) type and the size of your company.
For the platform type, the main ATS categories are:
Software as a service (SaaS)
These complete, turn-key solution providers host your platform and company data on a cloud-based server. They typically provide set-up, support, and ongoing customer success management to help you get the most out of the product. Many companies are moving to SaaS platforms due to their ease of use and 24/7 access-from-anywhere.
On-site
These software platforms are hosted on the company's own IT infrastructure. They provide benefits such as more customized security and data maintenance possibilities but require much more upkeep and IT resources.
Integrations
These smaller, modular solutions integrate to create a complete ATS platform. ATS integrations are great for smaller companies with a more limited budget and allow for picking the ones that fit your requirements (and no more than you need).
Company size and type generally include the following categories:
- Enterprise. Large corporations, typically with 5,000+ employees. They operate in multiple locations and have complex recruitment and data management requirements.
- Small or medium-sized businesses (SMBs). Companies with hundreds of employees, possibly in more than one location. They will typically require less powerful ATS features and data storage than Enterprise clients.
- Agency. They will typically need large amounts of data storage and applicant processing capabilities due to higher volumes of job applicants.
The first step in choosing an ATS is matching the above categories to your company's profile so you can focus your product search on solutions that best fit your needs.
The cost of an Applicant Tracking System
Before pricing is adapted for you, you'll probably be starting with one of the following models:
Flat rate
This ATS pricing model means you pay one amount regardless of user count or any count. A flat rate is usually calculated according to company size and is best for large enterprises that can afford a multi-year-long contract at once.
Pay per user
This model is suited for smaller companies since you get charged for the number of recruiters and other hiring stakeholders on the admin side of the Applicant Tracking Software.
Pay per vacancy
This model depends on the number of active job openings. Pay per vacancy works well for small businesses with low hiring volumes.
Pay per module
When the Applicant Tracking Software is part of a larger platform, this pricing model is typically applied. It's an additional feature you can add to what you already pay, like a CRM or onboarding platform.
When looking into the cost of an Applicant Tracking System, remember to involve every stakeholder in the process and draft a business case before vetting the best ATS solutions.
How to choose an ATS for your company
Follow these five steps to choose the ATS that's right for you:
We'll now break down each step to help you reach the best choice for your company.
1. Assess your needs
The first step in any decision-making process is determining your company’s needs. You can start this process by writing down all the requirements that you can think of that will improve your recruitment process.
Be sure to collaborate with your recruitment team members and significant stakeholders (like hiring managers) throughout the company. Conducting a simple survey via email or a platform like SurveyMonkey will give you great insight into what your company as a whole feels they need from a new ATS platform.
The best way to facilitate this process is to take the time to identify and define the problem that you are trying to solve. You should clearly understand the issues you want to fix and improvements you’d like to make to your recruitment process. Collecting opinions from around the company will help clarify these problems and steer your search toward the platforms and features that will help solve those issues.
At this stage, you should consider which functions you need and which you don’t (we’ll talk more about this later in the article). This will help guide your questions to ATS providers during the assessment and selection phases.
2. Set a budget
The next step in choosing an ATS is to lay out how much money you’re willing to spend on a new platform and your desired return on investment (ROI). Make a list of the core benefits that an ATS will bring to your company, and measure those benefits relative to the cost of the platform.
You should know most ATS platforms’ standard pricing models at this stage. Typically, an ATS provider will charge on a cost-per-active-job basis. You pay a specific rate for each job vacancy you promote and process during the year. There may also be costs associated with customer support and maintenance that you will want to consider.
Make a list of all potential costs, clearly identify how much you’re willing to spend, and then create a list of must-have benefits and KPI improvements needed to hit your target ROI. It’s essential to link your target ROI to a specific business-related outcome (i.e., reduced time-to-fill will lead to increased revenue) to make selling your pitch to company decision-makers easier.
3. Review options
Once you’ve firmly established your needs and budget, you can start researching platforms on the market. Knowing your company type and desired ATS infrastructure will help focus your search on platforms that meet your needs.
These are all lofty goals when you first start looking into ATSs. Luckily, there are many online resources you can rely on to help zero in on the highest potential platforms. Websites like Capterra, TrustRadius, and G2Crowd all provide detailed and authentic reviews from real customers, feature comparison tables, and deep insights into platform performance and reliability.
After researching various ATS platforms, you’ll likely have a short list of options that you’re considering. Reach out to each provider to set up an introductory call, a demo, and, most importantly, a full-featured test drive.
4. Test drive your picks
Once you have a short list of ATS platforms, you should request that the providers set up an extended full-feature test drive of each. This will allow you and your team to test the platform in a real-world setting to determine how well it integrates with your workflow and how well your team is adopting the new tool.
During this phase, try to use as realistic a test as possible. Note the performance of specific features, flag any concerns or unnecessary tools that may cause issues down the line, and make an overall assessment of the platform. Again, invite your team into this conversation to get as many perspectives as possible.
From here, you should be able to narrow your list of ATS platforms to just one or two. Then, you can apply your ROI, and cost-benefit analysis to your final shortlist to determine which one will give you the best “bang for your buck.”
5. Get started
Once you’ve selected your platform, it’s time to work with the ATS provider to get things set up with your IT department and recruitment team. Work through the implementation and onboarding process with the provider, ensuring that your team is involved at each stage.
Once fully implemented, you should monitor your team’s usage of the platform for variables such as ease of use, process improvements, and overall recruitment results. Continuously track and monitor your core KPIs to justify your spending when it’s time to renew your contract.
Questions to ask about ATS platforms
When choosing an ATS, you’ll want to keep a list of important questions to ask each provider. These questions relate to your core requirements and budget and will help you determine which platforms to dig deeper into and which to eliminate from your considerations.
How you generate these questions — and track the answers — is entirely up to you. But, it’s good practice to focus on the following areas when creating your question list:
- Candidate engagement
- Candidate management
- Scheduling and interviewing
- Reporting
- Integrations
- Security
- Support
- User experience
In this section, we’ll share a few sample questions from each topic.
Candidate engagement
- Can I source new candidates easily with this platform?
- Does the platform enable us to promote our jobs on multiple job boards? Which job boards and social media sites can I post to using your platform?
- What is the end-to-end process for posting job ads?
- Is it possible to set up an employee referral program?
- What features does this platform have for employer branding enhancements?
- Can you walk me through the candidate application process?
- How does the platform parse, sort, and shortlist standout applications?
- What features are there for communicating with candidates? Does it come with automated communication features?
Candidate management
- What kind of information does the platform store in a candidate’s profile?
- What is the process for advancing candidates through the pipeline?
- How does the platform manage job offers and documentation?
- What task management features does the platform offer?
- How does the platform enable collaborative hiring?
- Can I sync my company email with your platform?
- Do you have features that support unbiased hiring?
- Do you have a mobile app for on-the-go recruiting?
Scheduling and interviewing
- How does your platform support pre-screening? Can I customize this process?
- Are there automated scheduling features for interview planning?
- Will the platform sync with our calendar and meeting rooms?
- What pre-made interview and scorecard kits are available?
- How does the platform track interview results?
- How does the platform collect and track comments and feedback for each candidate?
Reporting
- What pre-made report templates do you offer?
- Can you create custom KPIs to track?
- Are there automated reporting options?
Integrations
- What are the major recruitment and HR software platforms you integrate with?
- Can you integrate with my current platforms?
- What are other add-on integrations that we could set up later?
Security
- Is the system compliant with all data and privacy laws?
- Where is the data stored?
- How is the data secured and encrypted?
- In the event of a data breach, what is your protocol?
Support
- What support do you provide for implementation and onboarding?
- Do you provide training for all team members who use the product?
- Will we be assigned an Account Manager and Customer Success Manager?
- What are your support hours? Do you have a live chat feature?
User experience
- How easy is it to implement this platform?
- What is a typical learning timeframe for new users?
- Do you have case studies focusing on ease-of-use or overall user experience?
Applicant Tracking System implementation
Preparing for implementation is one of the most overlooked steps when choosing an ATS.
Get everyone on board
When implementing a new system or replacing an old one, it’s important to ensure you get buy-in from everyone involved.
It’s good to begin by highlighting how the new system will improve performance across the board. You can help your team focus on the benefits by using case studies or showcasing statistics on how other companies have benefited from using the selected ATS.
You should also be looking at providing training for new users and making sure that your team can practice using the software before you go live.
Clarify goals
Clear goals and measurable metrics will help you stay on top of your hiring. To do this successfully, first figure out your success metrics:
- Make sure you have short and long-term hiring goals.
- Create an ongoing plan to track measurements so that you can improve over time.
Companies measure recruiting metrics differently, so make sure your company uses the most up-to-date and relevant hiring metrics.
Identify and use vendor help
Vendors are experts in implementing their ATS, so they know what works and what doesn’t.
Many ATS vendors offer implementation help to varying degrees, usually depending on the size of the company or hiring team.
Most vendors assign consultants to help with every step of the process for larger clients. Make sure to utilize this benefit to get as much help and support as possible during setup.
Some vendors offer support articles, videos, quick start guides, and the ability to chat directly with customer support agents from within the ATS platform.
A top-rated support team will share tried-and-true best practices, helping users succeed with the platform long after implementation.
Lastly, plan ahead!
List your pain points, establish clear communication with your team and the vendor, ask for help if you need it, and then go live.
The future of ATS software
When selecting an ATS platform, it’s a good idea to look to the future to understand where these platforms are going and what your needs might be in five or ten years.
The ATS market is growing rapidly, with a $2.3 billion market value in 2023 that’s expected to grow at 6.7% CAGR to $3.2 billion by 2026. This is fuelled by a growing demand for automation and digitalization across the workforce and the increasing potential of AI-driven technologies to handle greater scale and complexity.
As a result, companies are investing heavily in automation technologies as businesses increasingly see the need and value of automation and AI technology to identify and attract talent faster. At the same time, there’s also the potential for deeper and more robust analytics and data-driven decision-making in HR, that modern ATS platforms are poised to deliver on.
When considering new ATS platforms, therefore, companies need to keep an eye on these trends. Look for platforms that are future-proof and actively investing in the next phase of ATS innovation.
Specifically, ATS platforms are expected to innovate in the following areas:
- Increasing integration with AI that will fuel more automation capabilities, a deeper analysis of candidate’s career profiles for screening and alignment with job requirements, the ability to predict potential success, and deeper and more accessible analytics and querying against recruitment data.
- Improved candidate experience and communication. With the growing complexity of large language models (LLMs), candidate communication tools like always-on chatbots and automated messaging will become more deeply integrated into ATS platforms. This will give companies much greater flexibility and control over how and when they communicate with employees.
- Reduced complexity. Software, in general, is trending toward low-code or no-code interfaces, meaning that non-technical users can create automation workflows and complex systems using simple drag-and-drop interfaces. This will make ATS platforms both easier to use, and more powerful for end users.
- Greater mobile accessibility to meet candidates where they are, to appeal to younger generations in the workforce, and to fully engage with remote and hybrid workforces.
Each ATS platform you consider will realize the above progress at different cadences and with varying degrees of success and complexity. No platform will do it exactly the same. However, if you’re in the ATS market right now, it’s important to keep developments in mind so that you select the right solution for today and tomorrow.
Conclusion
ATSs are essential in simplifying and automating your recruitment process and help you become more efficient and effective in your day-to-day tasks. They also play a part in enhancing your candidate experience, decreasing your workload, and improving your hiring results.
However, ATSs are not solely responsible for attracting, sourcing, or selecting the right candidates. These are related to your recruitment and employer branding strategies, and it's important to have a solid strategy in place too.
Before buying an ATS, assess your needs and budget, look into options that best fit these needs, and take them for a test drive. Utilize demo calls with vendors, ask them anything you have in mind, and have them show you how their product works to assess which ATS is best for you. If your vendor of choice also offers a free trial, sign up after the demo to get a feel of the platform yourself.
Once you have these core building blocks in place, you're on the right track. However, the candidate's journey doesn't end here. Focus on the remainder of your talent management process, ensuring that hard-won employees stay with you for the long term.
Applicant Tracking Systems FAQ
What is the primary purpose of an application tracking system?
The primary goal of an Applicant Tracking System is to simplify the recruitment process and to make it more effective and efficient. This is accomplished by giving recruiters access to a powerful, centralized platform to collect and view applicants, track their progress, and filter them out based on their qualifications.
How does an applicant tracking system work in the recruitment process?
Applicant Tracking Systems are continuously active, automated platforms that are integrated with virtually every stage of the recruitment process, including:
- Candidate sourcing
- Candidate management
- Pre-screening candidates
- Screening candidates
- Managing job offers
- Onboarding new hires
- Recruitment process optimization
How does an ATS compare to other recruitment software?
Applicant Tracking Systems are just one of a whole suite of recruitment tools available to hiring teams today that tackle priorities like workforce planning, sourcing, candidate acquisition, application tracking, onboarding and analytics.
In general, ATS platforms represent one of the most widely used turnkey solutions within the recruitment software umbrella. The variety of options available to HR teams means that there will almost always be a recruitment tool that matches a company's cost and abilities requirements.